Repsol has reached a deal to sell a 25% stake in Repsol Upstream to Breakwater Energy, a newly formed, fully-owned subsidiary of EIG for around $4.8bn.
The consideration includes debt of the oil and gas exploration and production (E&P) business of Repsol.
According to the Spanish energy company, the deal values 100% of Repsol Upstream at around $19bn. News about a potential deal between the parties was reported in June 2022.
Repsol will retain the remaining 75% of the upstream business, which is said to have a diversified portfolio of assets in various parts of the world.
The upstream assets are located in the US, Canada, Mexico, Brazil, Peru, Bolivia, Trinidad and Tobago, Venezuela, Colombia, Norway, the UK, Algeria, Libya, and Indonesia.
Repsol said that the agreement between the parties includes the likelihood of listing a minority stake of the upstream business in the US from 2026 onwards in case of the market conditions being favourable.
Repsol CEO Josu Jon Imaz said: “Our ambition is to lead the energy transition. This pioneering agreement allows us to maintain the strategic direction of the upstream unit and, at the same time, to boost the transformation of the company and its multi-energy profile to achieve zero net emissions by 2050.”
Repsol Upstream is expected to produce an average of nearly 570,000 barrels of oil equivalent per day this year. Its proven and probable reserves are 2.3 billion barrels of oil equivalent, of which around 70% is gas.
Since the start of this decade, Repsol made 13 discoveries. The total gross resources of these are over 900 million barrels of oil equivalent, which are located primarily in the US and Mexico.
EIG chairman and CEO R Blair Thomas said: “Evaluation of ESG impact is integrated into EIG’s core investment and portfolio management functions, and we look forward to working with Repsol, a world-class operator and energy transition leader, to continue building on the business’s ESG best practices.
“As the world looks to meet the twin goals of decarbonisation and reliability, we believe this partnership is well positioned to help meet the growing global demand for accessible, efficient and safe energy.”
The deal, which is subject to the usual regulatory approvals, is anticipated to close within the next six months after the conclusion of the corporate structure of Repsol Upstream.
